Question 2: What are the barriers to reaching scale with mobile agriculture information services and...
Question 2: What are the barriers to reaching scale with mobile agriculture information services and how can partnering with a mobile network operator reduce these?
Hello Stephane,
Many thanks for your insightful contributions to this discussion!
I just wanted to comment on your assertion that a call centre with handling capacity of 70 requests per day may not be an improvement on existing in-person extension service delivery.
As a matter of act, I have been working on some research on the efficiency of extension service delivery and I find that extension agents in Ghana are occupied by the delivery of technical advice roughly 15-20% of the time. Administrative and project delivery activities are prominent among their activities.
Certainly, it would depend on the level we are considering (district, region, or national) but responding to 70 technical questions per day strikes me as a considerable capacity. In many cases I would expect it to provide efficiency gains over in-person delivery. Yet, what I would be concerned about is the articulation of the demand for the service. From what we are seeing, in-person technical advisory services are triggered more so by the extension agents noticing the need and delivering the advice, rather than farmers expressing the demand.
Cheers,
Mira
I agree with Stephane about the challenges with the use of SMS 'today' in these communities but when we start thinking of 'tomorrow' and the rapid growth of technology, we will have no option than exploring some of these options.
The paradigm shift of agriculture from 'aid' to 'business' could also help overcome the challenge with sms use.
Firstly, this paradigm shift is resulting in gradation of farmers whereby semi-literate and literate farmers are emerging with agriculture as a business. The downside of that is, we are also creating some divide among these farmers. But we are talking about viable, scalable, commercial business models here.
Secondly, in some of the models that are being explored in Africa, farmer groups/coorporatives are the target rather than individual farmers. With that, it is expected that groups will definitely have literate members to take care of the intermediary role.
Ben
I think Ben is making a valid point. We should not focus only on what is here now but also on what is good for the future.
Here again, it doubt that SMS is the future. This is mostly due to the cost issue. Today the price per character is between 500 to 1000 times cheaper on a data connection compared to SMS. The limitation of character set (latin/ascii) in most network, plus the limitation in interaction and character lenght is another huge limitation. So if i had to bet on a future technology i would go more for data connection (GPRS is now available almost everywhere is a GSM signal) and target also feature phone that could support more advanced options, such as icon-based interface. I think that the future of access for those who cannot use textual interface is more likely to be such option. SMS was a good technology, it is still a good option for a given population segment, but it not imho a solution for the bottom of the bop, and is not a solution for the future.
steph
I appreciate the challenges regarding partnering with MNOs and would like to push the envelope a little farther.
Telcos are not in the business of increasing incomes of smallholder farmers. They are, however, necessary distribution channels for the delivery of information that will improve productivity/quality/prices and lead to increased incomes at a large scale. However, there are obviously different philosophies on how to achieve impact by partnering with telcos.
What are some of the approaches to reach scale and achieve impact at the same time? I would argue that content providers need to own the data and retain usage rights over it. Information needs to be made available to as many farmers as possible, not only those farmers that are subscribers of one telco or another. However, the telcos need to differentiate themselves in highly competitive markets. If they view content as a differentiator, they will not want other MNOs to access it.
I would appreciate the thoughts of this group on ways to resolve this conflict.
Hi All,
Here is my view on the barriers to reaching scale with mobile information services:
If right products in which the targeted beneficiaries find value are created, scaling should happen by itself. The question is how to create the right products for those who are in the very Bottom of the Pyramid.
Two major aspects which may be barriers in the scaling up mobile information services are :
Accessibility
Affordability
(Accessibility is presumed to include ' access to MNO for smooth and easy enrolment process and Point of Presence for post-sales service either for communication or for availing information services')
However, once the mobile network is well established and the affordability improves they can be seen as opportunities for large-scale mobile information services than barriers in scaling up.
Other barriers to reaching scale with mobile information services are:
1. Infrastructure strength and Reliability of message delivery : An MNO not having a strong presence in a region has less effective infrastructure and hence less reliability in delivery of messages to the customers.
In many developed countries, reach and quality of network coverage poses an impediment for scaling up. The MNO can support by ensuring adequate coverage, quality of coverage in terms of signal strength and reliability which will be a hygiene factor for providing information services.
2. Cost of delivery mechanism : The type of delivery mechanism has a bearing on its cost. OBD (Out Bound Dialler) disseminated over a voice message platform are costlier than SMS (text) messages.
Technology platform should be robust to handle high volume of OBDs within stipulated time. The MNO can facilitate smooth integration for monitoring data related to delivery and technology platform.
3. Low Average Revenue Per User (ARPU) of Customers : ARPU of customers is a measure of profitability for the mobile network operator. Low ARPU of customers , especially at the bottom of the economic pyramid having high price sensitivity becomes a barrier in scaling up or even the sustainability of the Business Model.
4. Language & Literacy: In a country with a lot of regional diversity in respect of language and literacy, aggregating precise and pertinent region-wise Content in the scaling-up process is a challenge.
5. Technology: Most economical feature phones are being used by the BoP subscibers with content dissemination through SMS and Voice messages. For them smart mobile handsets and higher generation data services are out of reach.
6. Govt. Policies : Govt. policies and regulations should enable scaling up and should not become an impediment.
Hello S Srinivasan,
You have articularteled very well the main challenges in reaching scale with mobile Information service. I would like to comment on ARPU.
The MNO needs to be creative about new services that they can add to the mobile information service and also look at other sources of revenue than the customer. Two examples that comes to my mind are :
The MNO need to be aware there are untapped opportunities which still needs to be explored.
Mr. Nweke,
I agree with you.
Offering a bouquet of mobile services related to Financial, Health, Learning/ Education and so on to the rural subscribers and bringing in an improvement in the quality of their living will result in their stickiness. It will also lead to an inclusive economic growth of the rural population.
S.Srinivasan
Thank you everyone for the very interesting discussion so far. I’d like to add to the point raised by Hillary, Mr Srinivasan and Sharbendu about farmers’ low willingness to pay for agronomic information and the associated low ARPU (average revenue per user) for mobile network operators. This is clearly a barrier to reaching scale with information services whose target market is smallholder farmers at the base of the pyramid. However, there are emerging examples of business models that are tackling this challenge by drawing on other revenue streams aside from the customer. One example is to offer a subscription to agribusinesses who would benefit from using the service to send targeted information to their contract farmers (see the Resources section in the forum menu - Chapter 5 in the Agri Vas Market Entry Toolkit has other examples of possible revenue streams).
The question I have is, how do you ensure there is a balance between providing a service that farmers trust (ie. the information is relevant, trusted and actionable) and reaching scale and financial sustainability by relying on companies who may have their own agenda?
I’m sure they’ll be more discussion on this when we get to Question 5: [Opens 29 Nov] - What are the methods for sourcing appropriate content to be delivered to farmers, what standards should be followed when disseminating information to farmers, and who is best placed to manage quality assurance?] but I look forward to any comments here on the issue of scale.
Hi All,
I agree with S.Srinivasan that scaling up mobile services is not a major problem a such, but the whole issue is what value is giving the farmers. Once they find out that their problems are being addressed through mobile services, then they will all turn to it as their savier
Having read the two comments above, I wonder if we need to define what reaching scale in a successful way means?
IKSL and Reuters Market Light have reached some degree of scale in terms of the number of farmers they reach with SMS but this does not mean they are yet financially sustainable.
Something to ponder and maybe clarify, if participants think it is important.